Here is our monthly update that examines the current state of the CPU and graphics card markets. The good news is that one of the two looks pretty healthy for your next build with a number of easy-to-buy options, while the other market may look even worse than it did a month ago. This comes as no big surprise as the global chip shortage persists, but we'll bet a few numbers on everything later.

GPU Market Update

The biggest question everyone is asking, of course, is the graphics card market. So we'll start there first. Unfortunately, the news is not good: graphics card availability and prices on a global scale have not improved, and indeed things have gotten worse.

The demand is still significantly higher than the supply. While both Nvidia and AMD are pumping out as many GPUs as possible with record sales, that's not enough to keep the industry happy right now.

Much of what we talked about in the last two market updates remains unchanged. That said, you can't just buy an off-the-shelf GPU at most retailers, and if you could buy a GPU it would be massively inflated. This includes GPUs in the lower price range. Everything from GT 1030 to RTX 3090 is either out of stock or selling at insane prices.

The reasons for this are also unchanged. So we will not go into the reasons why the market is like this. For more information, we encourage you to check out our two previous updates. However, the basics are as follows: AIB partners raise the official prices of their custom graphics cards well above the “official” MSRP set by AMD and Nvidia in order to respond to market demand and take advantage of the sauce train. Retailers then exacerbate the problem by either re-hitting graphics card prices or forcing retailers to purchase GPUs as part of packages with unwanted inventory such as power supplies or low volume motherboards. There is also an element of these players, both AIBs and distributors, who are selling large quantities of GPUs directly to miners, thus reducing retail supply to gamers.

The basic situation is that if you are looking for someone to blame you, turn that anger on the AIBs and Board Affiliates who are essentially an obstacle preventing you from getting GPUs at the prices suggested by Nvidia and AMD to buy.

What we heard in talking to retailers last month is that AIBs keep increasing the prices they have set for their graphics cards – these are the MSRPs for board partner models, separate from the Nvidia and AMD MSRPs for the entire GPU. Often times, when an AIB has inventory for inventory it will come with a price hike for the same model before dealers get involved beyond that. This particularly affected AMD GPUs like the Radeon 6700 XT, which was previously one of the most affordable GPUs on the market, although it was still significantly inflated compared to its MSRP.

Also Read: Build a PC Versus Pre-Built
(Scoring a GPU in the process)

A retailer informed us this week that GPU prices from distributors and AIBs are now so high that it will be difficult to decide whether to buy GPUs when they are available. This is because the local price for GPUs is way above what most customers are willing to spend. Hence, there is a significant risk that they will not be able to sell this GPU to cover the cost. This risk is compounded by the possibility of rising GPU prices. When a retailer buys a card at a very inflated price only to see it doesn't sell, prices go down. This card loses the retailer's money. This problem appears to contribute to a lack of readily available GPUs at retailers.

What's noteworthy in this discussion is that GPU retail prices outside the US are worse than the US when stock is available. Many AIBs set their MSRP in US dollars and base that decision on the US market before converting them to other currencies in other areas and applying various taxes, fees and simple regional price increases.

Right now, the demand for GPUs in the US is very high and buyers are willing to buy stocks even at inflated prices. This causes AIBs to increase their MSRP, which also affects the price increase in other regions. Except in other regions, pricing is already disproportionately high – usually higher than the direct conversion of USD plus tax for that region – making price increases more likely to go past the point that customers are no longer interested. For this reason, you often see some cards that are available in places in Europe and Australia at stupidly high prices, while the corresponding model is not in stock in the US, but at a comparatively lower price.

Also read: What is cryptomining?

Why is the demand for graphics cards still so high and why are people willing to pay crazy prices? The answer, of course, is cryptocurrency mining, especially Ethereum mining. Last month, the price of Ethereum rose 24% from the previous month, which kept GPU prices relatively constant in the scalper market. This month it's a different story.

At the time of this writing, Ethereum was up 53% in value compared to the previous month, despite a significant drop in value over the past week. At its peak about a week ago, Ethereum was over 90% more valuable. This will of course increase the profitability of the mining industry compared to last month, increase the demand for GPUs for mining, and exacerbate the whole problem.

For example, Ethereum's price hike affected the scalper market for GPUs on eBay. The prices for completed offers of new products were recorded in the last week. This is not good news as prices for all current generation GPUs are increasing month on month. The hardest hit were Nvidia GPUs, especially in the upper price segment, with price increases ranging from 15 to 20%.

RRP eBay average price March eBay average price April eBay average price May Current price inflation Price increase from March to May
GeForce RTX 3090 $ 1,500 $ 3,083 $ 3,126 $ 3,628 142% 16%
GeForce RTX 3080 $ 700 $ 2,256 $ 2,175 $ 2,601 272% 20%
GeForce RTX 3070 $ 500 $ 1,374 $ 1,400 $ 1,660 232% 19%
GeForce RTX 3060 Ti 400 dollars $ 1,297 $ 1,405 $ 1,617 304% fifteen%
GeForce RTX 3060 $ 330 $ 905 $ 884 $ 977

196%

11%
Radeon RX 6900 XT $ 1,000 $ 1,870 $ 1,814 $ 1,972

97%

9%
Radeon RX 6800 XT $ 650 $ 1,560 $ 1,480 $ 1,690 160% 14%
Radeon RX 6800 $ 580 $ 1,340 $ 1,330 $ 1,518

162%

14%
Radeon RX 6700 XT $ 480 $ 1,165 $ 967 $ 1,088

127%

13%
Average 188% 14%

Some graphics cards like the RTX 3080 and RTX 3060 Ti quadruple their MSRP on average, with both models being low volume and using chips for the RTX 3090 and RTX 3070 instead. In particular, the RTX 3060 Ti will continue to be used, compared to other models, it will be practically non-existent.

AMD cards have been spared the major price hikes, but are still on the up on average. The RX 6800 XT and RX 6800 are currently most inflated at an average price 2.6 times higher than their MSRP, while the RX 6900 XT and RX 6700 XT remain the best choices at just 2 times the price increase. "Only" 2x higher than the MSRP is as good as it gets, which is pretty sad. One reason AMD cards are not as inflated in the scalper market is that they are inferior to mining.

A trend can be seen here that the cards with better availability are less inflated compared to the surrounding cards and that considerably more cards have been sold for these cards. I wouldn't recommend buying a GPU at these prices, but the RX 6700 XT might be the best deal if you're desperate.

Another interesting thing is that the price of GPUs in the scalper market has not been directly tied to the price of Ethereum for a few months now. GPU prices follow the general trend of cryptocurrencies, but not in a 1: 1 ratio. For example, this month GPU prices rose an average of 14% while Ethereum rose a whopping 53%. In order for GPU prices to rise, Ethereum must rise significantly more.

Why is that? Mining is not an easy situation where you plug in a GPU and make coins at a constant rate forever. The profitability of mining depends on the price of the currency you are mining, but (in the case of Ethereum) it is also affected by two other factors: difficulty and gas prices.

As more and more people mine Ethereum, the algorithm adjusts the difficulty of mining to keep the rate of currency production constant. This gives each miner a proportionally smaller block reward from mining over time, reducing profitability. Over the past month, the difficulty of mining Ethereum has increased by 10 to 20 percent depending on the source, which has had an impact on profits from the currency itself.

The other factor is gas prices or the price to complete a transaction on the Ethereum network. When gas prices are high, miners charge more to complete transactions and therefore earn more as a reward for doing so. Along with block rewards, miners make money this way. Gas prices fluctuate a lot and it's not a steady increase over time like with trouble, but over the past week the price has come down which, in turn, affects the profitability of the mining industry.

How does the GPU market improve from here? I mean, we just saw worse prices than last month. How on earth is it getting better?

The most obvious route is when the profitability of mining drops, which makes GPUs less attractive to miners at high prices. This can be done in different ways: the price of Ethereum goes down, the level of difficulty goes up, or the price of gas goes down. Either of these things, or ideally a combination, will reduce profitability. You can be pretty sure that the difficulty will keep increasing. So it's just a matter of the price of Ethereum, which doesn't significantly outperform that surge. We saw this cycle in the last crypto boom and it will happen again.

In addition, other factors will come into play over the next few months …

One of them is the reintroduction of LHR or "Lite Hash Rate" GPUs by Nvidia, which is reimplementing a cryptocurrency mining limiter for the RTX 3060 and other GPUs. These graphics cards have a small version that requires a new driver to be run. The hash rate limiter is activated on this driver. The GPU cannot be used with older drivers that do not use this limiter.

How successful this will be is in the air. The last time Nvidia tried this with the RTX 3060, they accidentally botched their own efforts by removing the limiter with a driver update. It also remains to be seen how easy it is to bypass the limiter. In a recent survey, around 60% of 83,000 respondents were in favor of Nvidia, which limits mining performance on GeForce GPUs.

Both Nvidia and AMD will be releasing new GPUs in the next few months. Rumors are circulating about the GeForce RTX 3080 Ti and RTX 3070 Ti as well as the AMD Radeon RX 6600 series. Whether or not these graphics cards significantly improve the supply is unknown, but the chances are that a smaller chip will likely be used for the 6600, meaning there are more GPU chips per 7nm wafer.

Below, the Ethereum network will be rolling out changes that most in the community expect to reduce the profitability of mining. One of them is EIP 1559, which aims to cut gas charges in July. We won't go into details, but you can look it up if you want to dig deeper into how Ethereum works and its roadmap.

So if we had to wrap up the GPU market now, it would be absolutely terrible and the worst that has ever happened, but there are various developments that should bring improvements soon enough.

CPU market update

Much more positive is that the CPU market is almost back to normal. Especially if you're looking to buy an Intel CPU, there is no shortage of options in the market as pretty much everything from the 10th and 11th generation is available. AMD CPUs are becoming more and more available depending on the region.

First up, we have Intel processors, and the good news is that parts of the 10th generation are still available. This is excellent as we believe that the previous generation Intel line of products is currently great value for money as they tend to be sold at lower prices than their 11th generation counterparts.

Also read: Top 5 Best CPUs

Take the Core i7-10700KF, for example, which stays at $ 300, the same price as the Ryzen 5 5600 despite having 8 cores instead of 6, and $ 100 less than the newly launched Core i7-11700K.

Similar situation with the Core i5 series. You can buy the Core i5-10400 for $ 170 or the Core i5-11400 for $ 210. The locked down Core i5-F models are a little harder to find than they were a month ago, but overall there is still a wide range of Intel processors to choose from at very competitive prices.

It's not entirely clear how long parts of the 10th generation will last as Intel is focused on producing the newer 11th generation. According to Amazon's list of best-selling CPUs, the current range of 10th generation parts is likely already in place, as Intel isn't currently attracting buyers' interest even on decent products. The most popular Intel CPU on Amazon is the Core i5-10600K, which even ranks 7th behind the Ryzen 5 1600.

With AMD CPUs, you can currently buy any AMD Ryzen 5000 processor in most regions of the world. They're easily stocked at MSRP, including the Ryzen 9 5900X which has been hard to find since launch. In general, it took AMD about six months to produce enough Zen 3 CPUs to meet market demand.

The only exception seems to be the United States. While the Ryzen 5 5600X is in stock and the 5800X is even being sold at a small discount, Ryzen 9 parts are still hard to come by. Given that stocks are looking good in other countries and that supply there is satisfying demand, it shouldn't be too long before the same situation can be observed in the US.

We are still unable to sell last generation AMD processors at a discount. Parts like the Ryzen 5 3600 and Ryzen 7 2700X stick with their starting MSRPs, which isn't a very attractive proposition in the current market, especially when compared to what Intel has to offer.

However, AMD seems to be locked into current CPU prices for one reason: They have built a strong AM4 platform that offers many upgrade paths for users without the need for a motherboard upgrade. For many, replacing first-generation Ryzen with a $ 200 Ryzen 5 3600 is still better than buying a new motherboard with an Intel upgrade path. Without cheaper Zen 3 processors, there is little incentive to cut last-gen prices. AMD also benefits from the lukewarm reception of Intel's 11th generation processors, with AMD being in the rare position of being perceived as a “better” CPU brand.

Purchasing links:
  • AMD Ryzen 7 5800X on Amazon
  • Intel Core i7-10700KF on Amazon
  • AMD Ryzen 5 5600X on Amazon
  • Intel Core i5-11400F at Amazon
  • Intel Core i5-11600K on Amazon
  • Nvidia GeForce RTX 3070 on Amazon
  • Nvidia GeForce RTX 3080 on Amazon
  • AMD Radeon RX 6800 on Amazon